I Need to Borrow Some Money
Whether you are behind on your mortgage, need to make critical car repairs or have hit a tough spot and just need some cash, borrowing money can tide you over. You have several options for where to borrow money. The best option for you depends on your situation, including how much money you need and how quickly you can repay it.
Other People Are Reading
-
Before You Borrow
-
Although it may seem in the moment like you need to borrow money, think about the long-term implications before you rush into borrowing. Consider whether you really need the money, or if you should just cut back on your spending instead. For example, if you have had a hard time making your rent payment each month and will not have the money on time, consider whether you should get a roommate or find somewhere less expensive to live instead of borrowing money. When you borrow, you have to pay it back, usually with interest, and this generally makes cash flow problems worse, not better.
Use a Credit Card
-
If you have a credit card, this is generally the fastest way for you to borrow money. However, credit cards are one of the most expensive types of long-term borrowing. You generally pay around 15 percent interest on credit-card debt and it could take you years to pay it off. Using a credit card is not a good idea unless you know you can make extra payments and pay off the debt within about six months. Usually, this is possible if you need to borrow only a few hundred dollars. Otherwise, there are less expensive ways to borrow.
-
Get a Loan
-
If you need to borrow a lot of money and will be repaying it for years, a traditional loan is the best place to turn. Get a personal loan from a bank or credit union with equal monthly payments over a fixed repayment term. This will prevent you from paying just the minimum on a credit card and taking years to pay back the money. Banks and credit unions check your credit report before issuing a loan, so this method usually does not work if you have not used credit before or if you have a bad credit score. Another option, if you have a retirement account, is to borrow from the account. However, this is risky because it reduces the earning power of some of your retirement savings, and if you fail to repay the loan, you often face steep early-withdrawal penalties.
Ask Friends or Family
-
If you have friends or family members who trust you to repay money, you could ask them for a loan. They will often lend you money without charging interest or fees. Plus, if you do not have any credit history, you might not be able to get a credit card or a loan from a bank. If you borrow from someone, be sure to write out a loan agreement, including when you will pay it back. Failing to repay a loan to a friend or family member could affect your relationship, so borrow only if you are confident you will be able to repay the loan.
-
